Merger activity in the U.S. energy sector reached its lowest levels in five years during the last three months of 2015, both for values and volumes, PwC US said Thursday.

During 4Q2015, 42 deals valued at more than $50 million were announced that together accounted for $31.6 billion, a 69% decline in value year/year. In 4Q2014, a total of 70 mergers and acquisitions (M&A) in the U.S. oil and gas industry were announced worth $103.4 billion. The quarterly report of announced U.S. transactions was analyzed by PwC using transaction data from Global Data.

Last year, PwC researchers estimated there were 179 deals worth a total of $196.1 billion, down from 278 worth $304.4 billion in 2014. Deloitte LLP earlier this month calculated the worldwide energy deal count also had fallen sharply from 2014, down by more than half to 379 from 709, while values declined overall by 20% (see Daily GPI, Jan. 25).

“Accelerating declines in oil and gas prices coupled with the closing of the capital markets for oil and gas companies during the second half of 2015 drove management teams to focus on cash preservation,” said PwC’s Doug Meier, U.S. oil and gas sector deals leader. “As oil prices stay lower for longer, cash flow will stay constrained resulting in companies operating in survival mode with a focus on realigning their strategies and business models.

“This internal focus resulted in a steady decline in oil and gas deal activity leading to the lowest fourth quarter in five years, a period that is typically strong for oil and gas deals. “

The headlines may be “depressing,” he said, but “dealmaking opportunities exist for companies with dry powder and who are willing to use their equity as currency for doing deals.”

Financial investors made 14 transactions worth $4.3 billion, or 33% of the total in the quarter. Equity commitments from private investors accounted for six of the 14 worth $2.2 billion.

There was a big drop in initial public offerings last year, with only five versus 23 in 2014, while follow-on equity offerings declined by 17% year/year. High-yield issuances dropped by almost half (48%), while investment grade debt issuances fell by 22% from 2014.

“Market participants are in a state of disbelief at the rate at which commodity prices seem to set a new floor every day,” said PwC’s Seenu Akunuri, U.S. oil and gas valuation practice leader. “For M&A activity to resume at a reasonable pace, it will take buyers who are patient and have long-term perspective on the potential value of the assets while it will take some motivation from sellers who have few other liquidity options and are able to get reasonable value under the circumstances.”